UNAIR NEWS President Donald Trump檚 decision to impose a 19% tariff on Indonesian imports has dealt a modest yet stinging blow to several of the country檚 export-driven industries. The finalized rate, though still substantial, is a significant reduction from the previously threatened 32%. According to Dr. Unggul Heriqbaldi, S.E., M.Ec., an international trade expert from 檚 Faculty of Economics and Business (FEB), the lower tariff is the result of successful trade diplomacy that deserves recognition.
淔rom a diplomatic perspective, this is a meaningful outcome. We檝e managed to minimize potential damage that could have severely impacted labor-intensive sectors, he said.
While a 19% tariff remains burdensome, it is far more manageable than the initial proposal and reflects Indonesia檚 continued relevance in global supply chains.
Labor-intensive industries at risk
Sectors such as textiles, footwear, wooden furniture, and fisheries are particularly vulnerable. These industries operate on thin margins, making them more sensitive to cost increases. 淭he U.S. still accounts for roughly 2025% of Indonesia檚 footwear and apparel exports. If prices go up, buyers may shift their orders to competing countries like Vietnam or Bangladesh, he explained.
Low value-added agricultural products like frozen shrimp, coconut, and processed palm oil are also likely to feel the impact, especially when coupled with logistical challenges and non-tariff barriers (NTBs) such as certification requirements.
Nevertheless, Indonesia still holds competitive advantages. Flexible manufacturing systems, reliable product quality, and on-time delivery continue to distinguish Indonesian producers. 淭he key is maintaining production efficiency and quickly adapting to market needs, he added.
Outpacing ASEAN neighbors
Compared to other ASEAN nations, Indonesia stands in a relatively advantageous position. Vietnam now faces tariffs as high as 46%, Thailand 36%, and Malaysia 25%, while Indonesia檚 rate has been reduced to 19%. 淭his gives Indonesian producers a strategic opening to offer themselves as alternatives to global buyers moving away from Vietnam, he noted.
This shift presents a promising trade opportunity攏ot just to maintain current export volumes, but to capture additional market share from regional competitors.
Three strategic opportunities
Dr. Heriqbaldi identified three pathways Indonesia could pursue: redirecting global supply chains toward Indonesia, strengthening bilateral trade diplomacy, and reforming domestic logistics infrastructure.
淭his tariff hike isn檛 a warning sign of crisis攊t檚 a signal for us to boost efficiency and seize emerging opportunities, he concluded.
While global markets may be tightening, Indonesia continues to chart a steady course forward.
Author:
Editor: Ragil Kukuh Imanto
